Economics

the causes of economic growth...

2010-01-21T21:40:00.000Z

There are clearly some benefits of economic growth. These benefits are most visible when for low income countries. Economic growth enables the possibility to deal with many serious problems of poverty, homelessness and lack of basic amenities. However there are clearly several issues, which suggest that economic growth, has contributed to serious social, environmental and economic problems, which have reduced living standards. This is not to say economic growth is doomed to bring unhappiness. In fact the challenge is to harness the potential of economic growth to make sure it really does increase sustainable living standards.
Benefits from economic growth are:
1) Increased consumption. - consumers can benefit from consuming more goods and services. An assumption of economics is that consumption is related to utility, so in theory, with higher consumption levels, there is greater prosperity.
1) Improved Public Services. - with increased Tax Revenues the government can spend more on important public services such as health and education. Improved health care can improve quality of life through treating diseases and increasing life expectancy. Increased educational standards can give the population a greater diversity of skills and literacy. This enables greater opportunity and freedom. Education is seen as an important determinant of welfare and happiness.
2) Reduced Unemployment and Poverty -economic Growth helps to reduce unemployment by creating jobs. This is significant because unemployment is a major source of social problems such as crime and alienation. However, despite rapid increases in economic growth since the Second World War, areas of high unemployment in the EU remain. For example, in France and Spain there are currently high levels of structural unemployment. This kind of unemployment may not be reduced by economic growth.
3) Economic growth may lead to negative externality - it involves increase in output causes external side effects, such, as increased pollution. Global warming from pollution is becoming a real problem for society. The economic and social costs could potentially be greater than all the perceived benefits of recent economic growth. However, it is worth noting that economic growth doesn’t necessarily have to cause pollution. The benefits of growth could be used to develop better technologies that create less pollution. It is just at the moment this has been a low priority.
4) When it is economic growth I think it may have a big gap between poor and rich. It is perhaps a paradox that higher economic growth can cause an increase in relative poverty. This is because those who benefit from growth are often the highly educated and those who own wealth. In 1980s and 1990s higher growth in the UK and US has resulted in increased inequality. However, it depends on how growth is managed; economic growth can be used to reduce inequality. It is another paradox that as incomes increase and people are better off the level of crime has increased as well. This suggests that crime is not motivated by poverty but perhaps envy. One reason why crime rates increase is that quite simply there are more things to steal. Economic Growth has created more goods to steal. However the link isn’t absolute for example in recent years crime rates in US have reduced from their peak. But there has been a general association between growth and crimes. Economic Growth has enabled improved health care treatments, but at the same time there has been an unexpected rise in the number of diseases and illnesses related to increased prosperity. One example is obesity. Modern lifestyles and modern diets have created an epidemic of obesity, with significant proportions of the population expressing a desire to lose weight. It could be argued that problems such as obesity and stress related illnesses are not a direct consequence of growth. This is true, but, it is symbolic of the fact increased prosperity has created as many new problems as it has solved

revision chapter 5

2010-01-18T21:49:00.000Z

The economy examine in:
* Economics growth - when economy increase in output.When output increasing,unemployment usually falls for economy it is better when unemployment is low.
* Inflation/deflation
* Assessed by examining it is balance of payments.
There are some reasons why inflation rate has fallen and stayed relatively low:
*reduction in inflationary expectations (result from government monetary policy)
* high value of the pound
* increased global competition ( when firms have to keep their costs and prices low)
* advanced in technology adn the immigration from EU and the rest of the world it helped to increase AD and AS.
Inflation rate - the % increase in the proce level over a period of time.
Basicly government have always had general policy objections in the macroeconomy but in recent years many have more specific targets.
Sustainable economic growth - economic growth step by step =>increase in AD/AS=> trend growth (the expected increase in potential output over time.It is measure of how fast the economy can grow without generating inflation.
Current account deficit - when money going out from the country more then money going in the result of sales of it is exports,income and current transfers from abroad being less than imports and income and current transfers going abroad.
Economic stability when:
balance of payments position has been somewhat downgraded (decrease) as an objective.
Hyperinflation - an inflation rate above 50%
Nominal GDP - an output which is measured in terms of the prices in the year.Nominal GDP can be distorted by inflation.
When GDP risen it is mean that labour prodactivity is risen (output per worker hour)
Informal economy - in comparing country's real GDP over time and between country's, other problems cam occure,economic activity that is nor recorded of registered with the authorities in order to avoid paying tax or complying with regulations,or because the activity is illegal.
Consumer price index - a measure of changes in the price of a representative basket of consumer goods and services.
Retail price index - measure of infaltion that is used for adjusting and other benefits to take account of changes in inflation and frequently used in wage negotiations.

mod2;revision:

2010-01-15T23:53:00.001Z

Government spending decisions are influenced by a several factors:
*the government view on the extent of market failure and it is chance and ability to correct it.
*the level of economic activity in the economy can have an infuence in government spending. (high level of uneployment may lead an increase in government spending and it will be shift to the right in AD and the out put in the economy.If it the high level of inflation the government may reduce government spending
*increase in health,education,transport the desire is made by voters, this can be made by desire to please the electorate(voters) the government may win electorate by increasing in health,education,transport etc before election.
*WAR,TERRORISM,RISING CRIME, may have an increse in government spending.
Net exports (exports-imports) the influence on export revenue and import:
*real disposable income abroad - a rise in income abroad is likely ro result in more exports being sold.
*real disposable income at home - a rise in income in the own country may lead to fall in exports ( because firms may use goods from exports to the home thus will increase in AD.
*the domestic price level - the amount of exports may fall and the value of imports rise.If the domestic price level rises relative to the price levels in the country's trading partners.
*the exchange rate - a fall in a country's exchange rate will reduce the price of exports and raise the price of imports casued by inflation rates. this os likely to result in a rise in exports revenue and a fall in imports expenditure.If it will rise in rate is likely to result in fall in net exports.
*government restrictions on free trade - a country's net export
*Government restrictions on free trade - when a country's net exports may rise if other countries governments remove limits.(tariff-a tax on imports)
The relationship between AD and the price level.
There're 3 effects which explain why the AD curve is downward sloping (going down):
*the wealth effect - changes in housholds and firms real wealth when the price level changes. When the price level is fall it leads to increase in amount of goods and services that wealth kept in bank accounts and other financial assets in the form of money. It it a rise in the price level it leads to reduce the price level in purchasing power of wealth and it cause in AD to contract.
*the rate of interest bonds - if it increase in price level it can lead to sell financial assets (government bonds -a financial assets issued by the central government as a means of borrowing money)
to recive more money to pay a higher cost. Increase in the supply of government bonds to reduce their price.
*the international trade effect - increase in the price level will not lead to increase in prices and rate. It will have an effect on firms and housholds to buy more from foreign producers and less form domestic producers => net export would fall anf demand will contract.

mod 2;revision; half from the chapter 4

2010-01-14T21:53:00.000Z

Aggregate demand (AD) the total demand for goods and services produced in an economy at a given price level.
AD=G+I+C+net exports
Price leve - the average of each of the prices of all the products in an economy.
consumer expenditure - spending by households on consumer products.
investment - spending on capital goods.
government spending - spending by the government on goods and services. Net exports - (exports-imports). Consumer expenditure is consumtion. The largest component of AD.It is spending by households on clothing,food,insurance.*Investment is the most variable component of AD. Basicly government spend on education,health care,police services,public goods and NOT include 1) transfer payments 2) job seeker's allowance 3) pensions . 1)transfer payments - money which transferred from one person(group) to another not with return. 2) job seeker's allowance - a benefit paid by the government to unemployed and trying to find a job. 3) pensions - basicly grandfathers and mothers who have lived honestly and paid taxes and insurance.
Net exports add foreigners (people form abroad) spending on the country's goods and services and deduct (take away) spending by the country's population in improts. If a country has a trade surplus (the value of exports exceeding the value of imports) with exports being greater than imports,then adding net export to C+G+I will shift to the right in AD if the existance of a trade deficit ( the value of imports exceeding the value of exports) would mean that AD would be lower.
There're a range of infuence on how much households spend:
*real disposable income (after taxes and inflation) this is the main influence on consumers expenditure. When rich people tend to spend more in total is average propensity to consume (apc) the proportion of income that is spent.
*Wealth - the more people have - the more they tend to spend.Wealth can be used to borrow or to spend it is called consumer confidence (how optimistic consumers are about future econimic prospects)
Change in the interest rate has important influence on consumers.Usually a fall in the rate of interest will a rise in consumer expenditure.
1) cheaper to borrow
2) it reduce the incentive to save, by spending people are giving up less interest.
3) those who are paying interest on mortgage/loan will have more money to spend.
Net savers - people who save more than they borrow.
St.day of poor people
redistribute income from the rich to the poor it will be an increse in total consumer spending.
Inflation - a sustained rise in the price level.
Savings is not part of AD.
Influences on savings include:
*real disposable income - save a higher proportion of the income (average propensity to save)saving devided by disposable income.
*the rate of interest - a rise in the rate of interest increase the reward for savings and encourages people to save more.Target savers - people who save with a target figure in mind. They save to achieve a sum in savings.
*confidence and expactations - households and firms a tend to save more when they not sure about future.
*savings schemes - when people want to save in insurance adn pension schemes.
*range of financial institutions - a good deal with well-respected institutions in the country to save.
*government policies - a decision by the government to introduce tax-free savings schemes it lead to encourage people to save more.
*the age structure of the populaton - basicly youngsters spend more in contrast with middle age.
Dissave - spending more then disposable income.
Investment. Without investmnet it will not any business schemes and development in economics. Firms invest, when they expect the profit form the capital goods that they buy to be greater than their cost.
Influences on investment include:
*changes in real disposable income. When real disposable income rising for consumer goods and services the demand is increase too. This can to encourage firms to expand thier capacity.
*expectations - firms are much more likely to invest if they see future in the plane.
*capacity ultilisation - firms more likely to invest to work to full capacity.
*corporation tax - is tax on firms profit. Keeping profit may lead to increase in investment.
The rate of interest - increase in rate will lead to stop investment. reasons:
increase in opportunity cost of investment.
opting ti buy capital goods
invesment is financed out of retained profit (some by borrwing)
more expensive to borrow and will decrease in invesment
will reduce the demand for shares.
*advances in technology - firm may buy new equipment in case in better quality or to produce more cheaply.
*price of capital equipment a reduction in the price of capital equipment may increase in investment.

wanna be cool like Olexiy!!!...^-^

2010-01-13T21:13:00.001Z

Government try to achieve:
to reduce unemloyment
stabilize balance of payments
reduce inflation
economic growth
and something else ^-^
cost push inflation (decreas AS)
demand pull inflation (increase AD)
What government shall do to reduce uneployment?
to:
1) to reduce taxes
2) to cut interest rate
3) to help to find a job
4) to REDUCE immigration ^-^ (india)
5) subsidy
6) to reduce import/more export
7) to reduce monopoly
8) to reduce "trade union power"
9) increase in nation service (army,,,etc)
10) reduce benefits =(
11) higher min.wage
12) increase in health,education,roads...etc
to reduce inflation:
1) increse in tax
2) to cut government spending
3) increase in interest rate:
Increased interest rates will help reduce the growth of Aggregate Demand in the economy. The slower growth will then lead to lower inflation. Higher interest rates reduce consumer spending because:
increased interest rates increase the cost of borrowing, reducing spending
Increased interest rates make it more attractive to save money
Increased interest rates reduce the disposable income of those with mortgages
4) privatisation and deregulation (transfer of assets from the public to the private sector)(The removal of government controls from an industry or sector, to allow for a free and efficient marketplace)
Causes of the inflation:
1) income
2) wealth
3) population
4) interest rate
5) high profits
6) income growth
and finaly : who is better arsenal or chelsea?

sociology for Mary presentation

2009-11-28T17:53:00.000Z

WHAT IS MARXISM?

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UK airlines and funny Belarusian airlines

2009-11-17T18:39:00.000Z

In this short text i will not show my knowledge in economics but i have to write something...
In 2008 the 1 of January world wide crisis enslaved our economy (basicly economy wich made by USA) A lot of airlines reduce prices for tickets, food served in less quantity, huge number of workers was fired, the nation's major airlines will stop flying more than 350 plane and lay off more than 4,000 employees by the end of 2009. British Airways, which made a loss of £401 million last year and extremely high cost of fuel and low wages influenced for flying amount.In the past few months, all the nation's major airlines have decided not to fly as many planes or employ as many people as they'd like as fuel prices reach unprecedented levels.
About Belarusian airlines this is like the brakes to respond to the crisis. Price for the tickets did not change, food served as usual etc... I think this happened because economists not educational or other factors. But since 8 month tickets fell in 30% and food served in less quantity and workers was fired. It is very strange and i think funny decision to overcome the crisis.

opportunity cost,,, watch!!!

2009-11-07T00:11:00.002Z

Just short

2009-10-12T20:40:00.000+01:00

*Disposable income - income after taxes
*Real disposable income - income after taxes on income have been deducted
*normal goods - goods for which an increase in income leads to an increase in demand
*inferior goods - goods for which an increase in income leads to a fall in demand
*substitutes - competing goods
*complements - goods for which there is joint demand
*private costs - the costs incurred by those taking a particular action
*private benefits - the benefits directly accruing to those taking a particular action
*external costs - the costs that are the consequence of externalities to third parties
*external benefits - the benefits that accrue as a consequence of externalities to third parties.
*social costs - the total costs of a particular action
*social benefits the total benefits of a particular action
*non-excludability - situation existing where individual consumers cannot be excluded from consumtion
*free rider - someone who directly benefits from the consumption of a public good but who does not contribute towards it's provision
*non-rivalry - situation existing where consumption by one person does not affect the consumption of all others.
*quasi-public goods - goods having some but not all of the characteristic of a public good.

Unemployment watch!

2009-10-10T01:55:00.000+01:00

economics demand/supply watch!!!!!!!!!!

2009-10-09T13:15:00.000+01:00

Infltion and Deflation ( i can't copy diagrams because i've mac )

2009-10-06T22:36:00.000+01:00

Infation : defined as a general increase in the price level over a period of time. For more tight people, Inflation - when the prices go up.
Cost - push inflation is caused an increase firms costs due to rising input prices ( wages, raw materials, energy, etc..)
Demand - push inflation is caused by a lot of demand chasing too few goods and services.
One clever and educational humen said that : Inflation is one of the "evils" in macroeconomics. In fact, price level stability is one of the three main goals of macroeconimics policy. Inflation's effects iclude
* Loss of purchasing power - all prices rise and no income, in real terms people becoming poorer. "real income" is nominal income minus inflation.
* Loss of savings. Savers are negativly effected to inflation.If you put $1000
in the bank at 5% interest today, but there is inflation of 10% in the next year,
then you will have actually lost 5% of your savings. The real interest rate is the
nominal interest rate minus the rate of inflation.
* Higher interest rates for borrowers: In times of high inflation, banks will
raise the interest rates they charge borrowers. A lender charging 4% interest
when there is inflation of 6% will actually be paid back in money worth 6% less
than the money originally lent. To maintain profits, banks must charge a
higher nominal interest rate than the rate of inflation, making it more costly
for firmst and households to borrow financial capital
* Effect on international competitiveness: High inflation at home makes
domestic output less attractive to foreigners, and imports more attractive to
domestic consumers. This could move a country's trade balance towards
deficit.

Deflation
When the prices go down is sound good, people who don't know about deflation become fools!

*Unemployment: Low demand for goods and services means firms must lay off workers.
*Delayed consumption: With the expectation of future price decreases,households will increase savings and decrease spending. This could lead to a deflationary spiral.
*Declining investment: If firms expect less demand for their output in the future, they'll invest less now, which could result in slower economic growth.
*Cost to borrowers: The real debt burden of borrowers increases as the price level falls. Bankruptcies result as borrower's incomes fall while the value of
the money they must pay back increases.

"East Asian Tigers"

2009-10-04T15:55:00.002+01:00

Intersting to know...
THERE ARE MANY similarities between Hong Kong and Singapore. They have both enjoyed high rates of economic growth over the past three decades, averaging six percent a year in real terms. They have made the transition from poverty to newly industrialized economies in a relatively short time. Both started off as British colonies, with British legal and administrative systems, and made their living as trading ports serving their respective regions. Singapore has been an independent republic since 1965; Hong Kong was returned to China on July 1, 1997. While Hong Kong and Singapore are now the busiest ports in the world in terms of throughput, they have divested from their reliance on trade since the 1960s, climbed the industrial ladder, and are now important international financial centers as well.
"Speculating" or "investing" in a property market in both cities is indeed is the main course of risk-loving locals and foreignes alike. This cities are knowing lke free traders and international fiancial centers with a few restrictions on trade and capital flows, which are many times their GDP.
The economy of Singapure is a highly developed state with mixed economy.While government intervention in the market is kept at a minimum, the state controls and owns firms that comprise at least 60% of the GDP through government entities such as the sovereign wealth fund Temasek. It has an open business environment, relatively corruption-free and transparent, stable prices, and one of the highest per capita gross domestic products in the world. Its innovative yet steadfast form of economics has given it the nickname the Singapore Model. Exports, particularly in electronics and chemicals, and services provide the main source of revenue for the economy, which allows it to purchase natural resources and raw goods which it does not have. Singapore could thus be said to rely on an extended concept of entrepot trade, by purchasing raw goods and refining them for re-export, such as in the wafer fabrication industry and oil refining. Singapore also has a strategic port which makes it more competitive than many of its neighbours to carry out such entrepot activities. The Port of Singapore is the busiest in the world, surpassing Rotterdam and Hong Kong. In addition, Singapore's port infrastructure and skilled workforce, which is due to the success of the country's education policy in producing skilled workers, is also fundamental in this aspect as they provide easier access to markets for both importing and exporting, and also provide the skill(s) needed to refine imports into exports.

Year Total trade Imports Exports % Change
2000 $273 $135 $138 21%
2001 -9.4%
2002 $432 1.5%
2003 $516 $237 $279 9.6%
2004 $629 $293 $336 21.9%
2005 $716 $333 $383 14%

2006 $810 $379 $431 13.2%

Year Singapore Dollars per US$1
1981 2.0530
1985 2.1213

1990 1.7275
1995 1.4148
2000 1.7361
2005 1.6738
2008 (April) 1.3643
2009 (March) 1.5123

click here ( it will help for understanding)

http://3.bp.blogspot.com/_EWkheAyOjdI/SU-RQayEnkI/AAAAAAAAALc/EMrBCAZyqZk/s1600-h/FinancialFlows-05-gic-temasek.png

Change this fucking tables!!!

2009-09-30T17:57:00.002+01:00

I'm so sorry for bad words in my blogg but now i'm sitting in my room and try to study therefore i use this words. Try to imagine the room for 3 person. One - Chinese, second - Iranian ( he always cough and seems that he will die a soon) third - i. I have to learn economics ( expansion, contraction, shift and so on) How can i study when "fucking" study TABLE smaller then I???!!! I haven't got any place to study!!! My back is curved, elbow is resting on the iron... Oh... Okay, if i would go to the study room? I'll come in and what can i see and hear?? crowded place where music plays in different loptops, a lot of voices and laughing! kill me...

reasons for a rise in the price of cocaine.

2009-09-26T17:01:00.002+01:00

Since 2009 MNF of Columbia detained 14 submarines with coca and destroyed hundreds laboratories which were used for manufacturing drugs. Since 1993 MNF of Columbia detained 47 submarines when they were suppling cocaine and destroyed thousands ha with cocaine. In 2000 USA gave 5 bil $ for destruction drug barons and there business.
The reasons for high prices is obviously:
1.Destruction drug barons ---> difficult to transport drugs from Columbia---> high demand for drugs and low supply-----> free market prices = HIGH prices for drugs.

oXoXo Breaking NEWS

2009-09-21T19:32:00.002+01:00

A CBI report suggests students should pay more interest on loans and higher tuition fees, sparking anger from their union...

and what the reason? Now i'll show the topic from another link and It's the KEY. All we know that education in UK become more cheaper because the rate gone down.

The pound has fallen against the euro and the dollar after a warning that UK public debt levels may not be sustainable.

after that UK government decide to raise up prices on education....=(

reduce thr national debt

2009-09-20T19:17:00.000+01:00

Reduce the national debt. The Organisation and Development estimates says that national UK will rise to 14% in 2010 and it's the highest in the West. The main hit will touch goverment bonds,pensions and saving suffer.While government raises taxes and makes big cuts in public spending,inflation growing up. Politician believe that the next priority must be reduce the national deficit.

recession in the football

2009-09-17T10:27:00.002+01:00

When the club REAL MADRID bought fooball players for which of them more then 40-80 pounds and it's one of the reason of recession. Clubs borrowes a lot of money from sponsorships and banks.... all clubs rise prices for the tickets, t-shirts,food and players. I haven't enouhg time to write more....

"UK become a country of hustlers?"

2009-09-16T21:32:00.001+01:00

Well. My dictionary says that "hustlers"- prostitution...funny isn't it? and another meaning "an enterprising and often dishonest person, esp. one trying to sell something." Which of this two allegations is more clear?...

In our days very difficult to earn money and a lot of people, businessmanes specially government try to find different ways of earning money. But "earning" doesn't mean legal. Legal earning is the most difficult way. And "dishonest" use "black schemes"- who knows what it's mean? Yes children it is illegal ie we cross the law. For example : when product comes from abroad and company must pay taxes,nds..etc there are a lot of rules and exceptions which i don't know.. (yes Chris it's my fall..) When the state has small means they become make " discounts " or "exceptions" for private companies or aliens for revenue MONEY! MONEY! MONEY! all society concerned by this "paper"... If the government will be doing BIG promotions ... whole economy goes to the dark gap... and it is values "become a country of hustlers"

"Every idea... is copied from a similar impression"

2009-09-15T19:16:00.000+01:00

HOMEWORK economics

2009-09-14T21:14:00.000+01:00

My Lovely HomeWork.
"The Netherlands typifies a European fear that any big fiscal stimulus might just benefit others..."
When crisis hit on our Earth, all goverments,politicians and summit thinking about how to solve this terrible problem. "Clever" people wearing expensive clothers, on their hands are beutifuly shinining Rolex, Breitlings for each more than 15.000-50.000 pounds, near their tables we can see Montblancs and pens parker (about expensive suits i don't know) Different politicians came to the summit ( i dont want to remember about their cars^-^) to solve the problem which tought all people,cities,countries ( we think, i mean, simple people think, that they will solve it. As for me, some of them bark to each other, some of them drink English tea, and some of them try to sleep puting on there faces porn magazines) What am i talking about? Oh. yes. Summit.
On this party, we can hear a lot of interesting things, for example: "arguments rage about the right way to beat the crisis thought FISCAL policy" One fat man in a beatifull suit stands up, from his pockets protrude big piles of English Queen and he said " I am concerned about that Americans' plans could trigger 'hyperinflation'?"
After their talk they spend time about a PIFFLING 5billion euro infrasrtucture fund proposed month earlier by the European Commission. After that there were a lot of arguments about : rising unemployment and corresponding rise in welfare bills, falling tax receipts, soaring deficits and public debt.
On the end of this GLAMOUR party they was distributed by pink hate and blue eyes. Evrika! They came to general decission. And they chose fiscal policy. This is the best and right way.
Fiscal policy is the use of government spending and tax revenue collection to influence the economy.Fiscal policy can be contrasted with the other main type of economic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and the supply of money. The two main instruments of fiscal policy are government spending and taxation. Changes in the level and composition of taxation and government spending can impact on the following variables in the economy:

unknown words 2

2009-09-13T15:38:00.002+01:00

jeopardise,Whoever,wield,admission,regardless,hasty,ridiculed,avoid,defy,vow,issue,Labour,frankly,sensibly,

,prospects, restore,credibility,revert,stubborn,denial,obvious,fiscal,forfeit,whatever,re-election,beyond,sensationalised ,headlines, imminent ,bankruptcy,pitfalls,coherent,

unknown words (to Chris)

2009-09-13T14:52:00.004+01:00

http://www.independent.co.uk/news/business/news/bank-holds-rates-at-record-low-1784780.html

boost, rate, monetory, pump, amid, encouraging, recovering, output, stock, reaching, governer, stunned,proposal,fiscal,outvoted,amid,reluctance,spluttered,halt,drastic,raft,recent,dampened, hailed,sustained,recovery,row,annual,declining,eased,approach.

ECONOMICS "How useful is knowledge of elasticity for a business?"

2009-09-12T21:52:00.002+01:00

Lets imagine that I'm businessman. What I have to know about Market? Demand and Supply? And elasticity will play the major role in this situation as It helps to understand whether my product will be demanded by consumers and will be competitive; also by knowing elasticity I'm as a businessman will be able to increase or reduce prices. However, elasticity is just an approximate measure and might not give an accurate picture of the situation.